There’s been a lot of buzz around small brands right now. Smaller brands want to be the next best thing and big brands want the growth of small brands.
The heat is on and marketers everywhere are feeling it. With the barrier to entry lower than ever, new products are appearing almost daily and speed to market is becoming a priority. Eighty-four percent of fast-moving consumer goods professionals said they feel more pressure to bring products to market quickly today than they did five years ago. Only 1% said they feel less pressure.
Companies are finding themselves constantly defending against new brands, shifting to address the latest trends, and fighting for more market share. As a result, larger companies are using every tool in their toolbox to keep pace with today’s consumers’ shifting desires. To get to market faster, 98% of marketers say they are cutting corners, spending less time on at least one phase of the innovation process. When we asked marketers if they felt like spending less time impacted their products’ chance of success, 90% said “probably” or “definitely.”
Perhaps not surprisingly, launching more quickly with less insight doesn’t seem to be fixing the problem. A look at innovation launches over four years shows us that new launches contribute 53% in incremental growth to small players versus 5% for large brands.
So what are small brands getting right?
Contrary to popular belief, small brands are not prioritizing speed. They’re investing more research time and the right way. Here are four things small brands are doing differently than large brands.
If you think about it, this makes sense. Smaller companies tend to have a much narrower portfolio, which means they have a lot more to lose if their product isn’t right. What we’ve seen in the market is that being first doesn’t always pay off—but being right does. Successful small brands are winning by being smart and focused in how and when research techniques are applied.
By rushing to market, and planning to tweak the approach on the fly, large brands are running several risks. First, product development is expensive, and a product that stumbles out of the gate in a sub-par form is just plain costing you money. Additionally, you run the risk of two very damaging side-effects to your most important audiences:
- Retailers (both brick and mortar and e-commerce partners) who are dissatisfied with your product’s lack of success could delist you or bump your further down the page, and it can negatively impact your partnerships for future launches.
- More importantly, you’ve also damaged your relationship with your buyer-base, diminishing your brand in their eyes, potentially impacting your whole franchise.
Your competition may be first to market, but you can avoid damaging key relationships that are much more expensive and time-consuming to repair.
Another secret to small brand success?
Small brands know they’re up against a lot. They’re trying to break through in a crowded marketplace and so they use whatever tools at their disposal to create personalized, targeted, buzzworthy marketing. While small brands often have smaller budgets, they’re more likely to invest in the right level of marketing support for their brand.
In the Nielsen CMO Report 2018, 93% of marketers surveyed said customer acquisition is their most important marketing objective. But there’s a gap between strategy and tactics. A Nielsen study of product launches across multiple markets and categories found that one-third of the initiatives floundered because they didn’t have the basic marketing support needed to attract new customers.
Large brands can absolutely win back share of consumers’ wallets. Here are a few tips for success:
- Focus on being both fast and smart
- Prioritize your strongest innovations
- Understand how every decision you make impacts the size of your revenue
- Create a compelling retail story so you can gain visibility on shelf and online
- Experiment and ideate on small number of variables, in small universe
This article originally appeared on MediaPost Research Intelligencer.